Bellway PLC (LSE:BWY) will issue its third-quarter trading update on Tuesday, 10 June, with attention centred on its progress toward full-year targets against a backdrop of uncertain interest rate expectations and a subdued housing market.
This update will cover the nine months to the end of March but will not include full financial statements. Instead, investors will look for progress on completions, selling prices, margins and forward sales.
At the half-year stage in March, the FTSE 250 housebuilder reported a 12% rise in pre-tax profits to £150.2 million for the six months to the end of January, helped by an 11.9% increase in housing completions to 4,577 homes.
Chief executive Jason Honeyman said the market had picked up since the turn of the year, with customer enquiries and reservations on the rise.
Management guided for more than 10% growth in completions to at least 8,500 homes, a stable average selling price of around £310,000 (£310,600 in the first half), and a 100 basis point improvement in operating margin to 11%.
Chief executive Jason Honeyman said the market had picked up since the turn of the year, with customer enquiries and reservations on the rise.
Investors will be watching for an update on the order book, said analysts at AJ Bell, and commentary on build cost inflation and any further legacy remediation provisions.
The order book stood at just under 5,600 homes valued at £1.6 billion as of December. First-half reservation rates rose to 0.51 per outlet per week, improving further to 0.76 in the seven weeks after 1 February.
Bellway shares remain around one-third below their pre-COVID peak, reflecting investor caution over housing affordability and planning constraints. Despite this, Bellway trades at just 0.93 times book value, below the sector average, suggesting potential value relative to peers.
Consensus forecasts point to a full-year pre-tax profit of £267 million, up from £184 million last year, with a dividend expected to rise to 64.7p from 54p.
Big investment banks have been bullish on the sector in recent months, with JP Morgan saying housebuilders "should benefit from supply-side initiatives enacted by one of the most pro-housebuilding modern governments". Bellway was one of its top picks.
Deutsche Bank said the sector looked undervalued and should continue its recent resurgence, after months of underperforming the rest of the market.